Distributor Entrepreneur of the Year – HDS

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No. It’s a defeating word – one that Howard Schwartz has encountered too many times in the two-decade lifespan of HDS (asi/216807). No, you’re not cut out for this. No, it’s way too risky. No, we can’t recover from this. “As a salesman, I don’t like the word no,” admits the founder and CEO. “When I start something, I don’t like to quit until I succeed.”

There were several critical junctures when the hurdles could have toppled HDS, and Schwartz and partners Martin Bohinski and Ryan Niggel could have accepted their fate or chose the wrong path. Instead, the challenges steeled the trio and turned HDS into a thriving $17 million business that grew 10%-15% last year and harbors grand future aspirations. Here were the times when “no” was not the final answer.

1992: When Schwartz officially started HDS, he was just a recent college grad with two phones and a fax line in a bedroom in his parents’ house. His game plan was simple: sell keychains and license plate frames to car dealerships around Pittsburgh. The first meeting he scored was disastrous; the prospect told Schwartz he should look into another line of work. “I got laughed out of my first meeting,” Schwartz says, “and nobody was going to laugh at me again.”

1996: Schwartz wrote $35,000 worth of business that first year. By his fourth year, he was at a million. Schwartz brought in Bohinski to oversee the finances. “Howard fit into the mold of a typical entrepreneur almost perfectly,” says Bohinski, the company’s CFO, “except for one quality – Howard always knew he couldn’t do it himself.”

1999: Bohinski and Schwartz decided to add in-house decoration as a way to differentiate the company and keep a firm grip on quality. With no knowledge about how to run the embroidery machines it had acquired, the company leaders ultimately found Niggel to lead what has become a thriving competitive contract decorator business. “I knew,” says Bohinski, “that decoration was something that could help us to answer the question: Why is your level of service better?”

2004: Hurricane Ivan brought major flooding to the Pittsburgh area – including HDS’ decoration facility, which took on eight feet of water. Half a million dollars in inventory and equipment was lost. “It would have been very easy to fold up tents on the decorating side of the company and walk away with some big losses,” says Niggel, the company’s COO. Instead, three months later the machines were back up and running. Four years later, the recession throttled the distributor right as it was on the precipice of $10 million. Spending from its biggest client dried up instantly. Both times, the company not only survived, but thrived. “It’s just perseverance and quality people,” says Schwartz.

2014: HDS may have started as the creation of a single determined individual, but it has evolved under the direction of a consensus-driven, ego-less triumvirate. Each brings their own perspective: Schwartz in sales, Bohinski in finance, and Niggel on operations. The company has an eye toward strategic acquisitions and is poised for growth, with an idea to replicate its distributor-decorator model in multiple markets in the next few years. Schwartz believes that growth can come without sacrificing the family atmosphere that has propelled HDS forward. “When I don’t know the names of my employees,” he says, “that’s when it will be a problem.” – CM